ProPetro's Q3 2025: Contradictions Emerge on Fleet Utilization, Equipment Mix, and Data Center Strategy

Date of Call: October 29, 2025

Financials Results

• Revenue: $294 million, down 10% sequentially vs Q2 2025
• EPS: Net loss of $0.02 per diluted share, improved from $0.07 loss in Q2 2025

Guidance:

• Full-year 2025 CapEx incurred expected $270M–$290M (prior range $270M–$310M); completions CapEx $80M–$100M; PROPWR ~ $190M.
• 2026 PROPWR CapEx projected $200M–$250M; 360 MW delivered/on order (deliveries by early 2027); target 750 MW by YE2028 and 1 GW+ by 2030.
• Maintain 10–11 active frac fleets in Q4 and expect to sustain at least this level into 2026.
• Executed LOI for a $350M lease facility to fund PROPWR; will prioritize organic free cash flow and draw judiciously.

Business Commentary:

* Completions Business Resilience: - ProPetro's completions business generated free cash flow in Q3, supporting PROPWR segment growth despite industry stagnation. - This resilience was due to their focus on capital-light assets and strategic cost reductions, preserving fleets for favorable market conditions.

• PROPWR Segment Growth and Contracts:
• The PROPWR segment has secured 150 megawatts in contracts, with expectations to reach 220 megawatts by year-end, supporting power demand in data centers and oilfields.

• Growth was driven by the demand for reliable, low-emission power solutions and strategic partnerships in the data center market.

• Financial Performance and Cost Optimization:

• ProPetro reported total revenue of $294 million, down 10% from the previous quarter, with a net loss of $2 million.

• Cost optimization measures helped navigate decreased activity levels, maintaining operational excellence and efficiency.

• Strategic Investments and Financial Flexibility:

• The company executed a letter of intent for a $350 million leasing facility, enhancing financial flexibility for PROPWR's expansion.
• This facility is designed to accelerate projects and maintain PROPWR's growth trajectory amid challenging market dynamics.

Sentiment Analysis:

Overall Tone: Positive

• Management emphasized resilience and cash generation: 'free cash flow for our completions business was $25 million' and described PROPWR momentum—'over 150 megawatts contracted' with expectations to 'reach at least 220 megawatts by the end of the year'—and called the company 'well-positioned' with a 'strong balance sheet.'

Q&A:

• Question from Derek Podhaizer (Piper Sandler & Co.): Details on the 60 MW data-center project (technology mix and potential to scale to 1–2 GW) and how you plan to fund growth to 750 MW+ and beyond?
  Response: Project uses reciprocating engines plus battery energy storage and is designed to scale; funding priority is organic free cash flow supplemented by a flexible $350M lease facility, with PROPWR's take-or-pay contracts enabling additional leverage as the business scales.

• Question from Edward Kim (Barclays Bank PLC): What is the term/duration of the 60 MW data-center contract versus the 10-year, 80 MW Permian contract; do you prefer shorter or longer terms; and how do equipment costs differ for data-center vs Permian projects?
  Response: They disclosed only that the 60 MW agreement is 'long-term' (no duration given); term is evaluated case-by-case and they'll sign long-term deals at acceptable returns; equipment cost averages about $1.1M per MW across the portfolio with no material delta for data-center projects.

• Question from Scott Gruber (Citigroup Inc.): How do you envision the split of deployed MW across oilfield, data-center and other end markets by the end of the growth period, and are economics/paybacks similar across verticals?
  Response: Near-term mix likely similar to current (majority oil & gas with growing data-center share), but data-center deals can shift the ratio quickly; economics and returns observed so far are broadly similar across verticals.

• Question from Stephen Gengaro (Stifel, Nicolaus & Company): Could data-center demand bid power away from frac operations and how would that impact the frac business; which product line (frac vs power gen) is more differentiated?
  Response: Management is not currently concerned—contracts, equipment differences and commercial agreements mitigate near-term risk of power being bid away; both lines are differentiated through customer-focused service, commercial flexibility and engineering/technology capabilities (e.g., BESS).

• Question from John Daniel (Daniel Energy Partners): Clarify fleet counting for simul-frac (count as 1 or 2); comment on the Q3 frac EBITDA (~17%) gap between contracted FORCE fleets versus others and criteria to idle fleets; and preliminary completions CapEx view for 2026 if activity stays at ~10–12 fleets.
  Response: Simul-frac is counted as one fleet; they proactively idle fleets rather than run subeconomically (idled 3 fleets in Q3) and see a clear margin gap for contracted FORCE fleets; completions CapEx will remain in maintenance mode in 2026 (no specific range provided).

• Question from Jeffrey LeBlanc (Tudor, Pickering, Holt & Co.): As you move into data centers, will you shift to larger turbines or keep the current equipment mix; and are you pursuing prime power or backup applications?
  Response: Comfortable with current equipment mix while evaluating larger/more efficient blocks as needed; the company will focus exclusively on prime power applications (not backup).

Contradiction Point 1

Fleet Utilization and Market Recovery

It involves differing perspectives on the utilization of fleets and the timing of market recovery, which are crucial for understanding ProPetro's operational strategy and financial outlook.

Can you provide more details on the 60-megawatt data center contract? What power solution is being deployed, and how do you see scaling this contract over time? - Derek Podhaizer

2025Q3: We expect the meaningful recovery to begin in 2026. We believe that by the end of 2026, fleets will be fully utilized. - Sam Sledge(CEO)

How large is the overhang from idle frac fleets in the Permian Basin, and how can the industry address the oversupply of frac equipment? - Derek John Podhaizer

2025Q2: The market disruption is expected to last through 2025 and potentially into early 2026, with ProPetro prepared to capitalize on recovery. - Samuel D. Sledge(CEO)

Contradiction Point 2

Equipment Mix and Market Strategy

It highlights a shift in the company's approach to equipment mix and market strategy, which could impact operational efficiencies and competitive positioning.

Will you shift the equipment mix to larger turbines for data centers? - Jeffrey LeBlanc

2025Q3: Comfortable with current mix but always evaluating new technologies for potential efficiency gains. - Travis Simmering(CPO)

How significant is the overhang from idle frac fleets in the Permian Basin, and how can the industry address the oversupply of frac equipment? - Derek John Podhaizer

2025Q2: ProPetro is not participating in this loose market, maintaining its positioning with next-generation equipment. - Samuel D. Sledge(CEO)

Contradiction Point 3

Contract Pricing and Market Dynamics

It involves differing perspectives on contract pricing and market dynamics, which are critical for understanding ProPetro's financial performance and competitive positioning.

Are you concerned about power arbitrage between data centers and frac fleets? - Stephen Gengaro

2025Q3: We feel good about our power arrangements for electric fleets. The equipment makeup also keeps these sectors distinct. - Sam Sledge(CEO)

Are there price reopeners in long-term contracts, and how stable is their pricing? - Jeffrey Michael LeBlanc

2025Q2: There are minimal changes in prices, primarily passive adjustments. - Samuel D. Sledge(CEO)

Contradiction Point 4

Data Center Contract Details and Term

It involves the specifics of a major contract in the data center market, which affects the company's growth strategy and financial outlook.

What are the details of the 60-megawatt data center contract? What power solution is being deployed, and how do you plan to scale it? - Derek Podhaizer (Piper Sandler & Co., Research Division)

2025Q3: We expect continued growth with existing partners in both term and capacity...The data center space is evolving rapidly, and there are layers of opportunity. We're excited for this entrance into the data center power market. - Travis Simmering(President, PROPWR Business) and Sam Sledge(CEO & Director)

Regarding the PROPWR business, are negotiations focused on oil and gas applications or data centers? - Edward Kim (Barclays Bank PLC, Research Division)

2024Q4: Our initial focus is on oil and gas applications within our existing customer base. There is interest in the data center space, but the vast majority of the initial 140 megawatts will go towards oil and gas. - Sam Sledge(President and CEO)

Contradiction Point 5

Fleet and Activity Outlook

It affects the company's operational strategy and expectations for market conditions, which can impact revenue projections and shareholder perceptions.

How will megawatts be distributed across oilfield and data center contracts? - Scott Gruber (Citigroup Inc., Research Division)

2025Q3: The distribution might stay similar in the near-term but can change with larger data center contracts. Economics and long-term opportunities guide decisions. - Sam Sledge(CEO & Director)

What range do you expect for active drilling fleets in the Permian Basin over the next 4-5 quarters? - John Daniel (Simmons)

2024Q4: We expect the number of fleets to remain relatively flat, but efficiencies continue to improve. The average fleet size has increased by 50% in the last five years, so the number of fleets needed for the same work has decreased. - Sam Sledge(President and CEO)